Renting to College Students

3 Replies

In my new member post I brought up wanting to buy a tri/four plex to house hack and a gentleman, Samuel Collier, suggested I look into purchasing a property near a major university that I live by. This got me curious as to the what kinds of experiences people have had renting to college tenants. 

Originally posted by @Igor Kalabukhov :

In my new member post I brought up wanting to buy a tri/four plex to house hack and a gentleman, Samuel Collier, suggested I look into purchasing a property near a major university that I live by. This got me curious as to the what kinds of experiences people have had renting to college tenants. 

 I started out renting my lake house to students just for the school year. Them I converted to VRBO. If say if your not going to use a PM, then get the parents to cosign on the lease. I found one group that were freshmen and the parents mailed me checks ahead of due date every month and it was great. The second year I let a PM handle it and these guys were seniors working and paying there own rent. They were late often and if I didn't have a PM in place I'm sure I wouldn't have gotten all the rent. One of the parents kept cobra ting me wanting to get their son out of the lease. I said no. If I had been and individual they probably would have just left and stopped paying. This is the only time I have used a PM and it actually paid off this time. The house was an hour away so it was just easier.

@Igor Kalabukhov

Student rentals comprise 50-60% of our units at the moment.   We rent entire houses and apartments primarily to later year or graduate students and have a property where we rent furnished rooms to international students.

Students are a little more management than many tenant classes - mostly because of being young and ignorant - however, if you offer them a lifestyle service rather than simply a roof, they can be wonderful tenants.  Turnover will be higher (1-2 years on average for us) as kids like to move around and change housemates and they grow and learn more about themselves.

Unlike John's advice above, I do not recommend having parents as a co-signatory  to the lease ... John gives a very good example of why we do not use them.  A co-signatory to the lease is a tenant with all the rights that entails, including the right of access (a helicopter dad/mom never plays well with housemates).  It also entitles them to contact you about the lease.

Rather than co-signors, we use a guarantor and execute a separate agreement (the guarantee) with that person whereby they guarantee the performance of the tenant.   Unlike a co-signer, a guarantor has the right to know the standing of the tenant with respect the the (financial) obligations of the lease default and the privilege of opening their wallet should the tenant default.  Guarantor is financially screened (credit history, etc) as a tenant applicant would be.

You will have a higher level of hands on management, you need parents as co signers and you must screen them the same as tenants. If you rent to first year students you can expect vacancies, or tenant issues, at Xmas when students start to drop out. Rent only to 2nd year and older for better tenant reliability. Expect additional damage and stay on top of your regular inspections. Inspect every couple of months.

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